Senator Tom Harkin (D-Iowa) charges Obama with "beginning the unraveling of Social Security"

[ProgressiveEconomist]

45. HOGWASH! It's the calendar that turned

the SS cash flow negative in 2010--after more than 25 years of Republican plunder--not the payroll tax cut.

And it's the newly negative cash flow that connects Social Security to the deficit. Either (A) the three trillion in the trust fund has to be paid back from the general fund or new T-bond issues; or (B) a Republican Congress will cut benefits to "strengthen" the program.

IMO the arrangements made to repay the payroll tax cut from the General Fund help assure that the solution to the problem posed by long-anticipated retirements of 10,000 Boomers a day will be (A) rather then (B).

Senator Harkin seems not even to understand what the Trust Fund IS! Because of demography, there was no 2010 SS surplus to "convert" into Trust Fund Bonds.

See Table 4.A1 at http://www.ssa.gov/policy/docs/statcomps/supplement/2011/index.html . By calendar 2008, the flood of positive FICA cash flow into Treasury that started in the 80s had slowed to a trickle. "Net payroll tax contributions" exceeded "Total Old Age and Survivors Insurance Expenditures" by only $59 billion.

The next year, the surplus was only $6 billion. And in 2010 the surplus finally turned negative by $40 billion. Since only $2 billion of that $40 billion negative cash flow was due to the payroll tax holiday, the cash flow would have been negative by $38 billion even without the payroll tax cut.

See also http://thehill.com/blogs/on-the-money/budget/197833-social-security-actuary-blesses-payroll-tax-bill . Social Security Actuary Stephen Goss, whose job it is to protect the financial soundness of Social Security, opined that the payroll tax cut would have a :negligible" effect on OASDI, both in the short run and in the long run.

IMO what Harkin has been doing is simply repeating wrong-headed Republican talking points that attempt to undermine the President.